Libertarianism And The Information
Revolution
Since biologists discovered in the 1950s that all life forms
could be understood as the processing of information, a new paradigm was
conceived, a new era began, which we call the Information Age, and most people
don't like it. The reason for this dislike is that the post-modern societies of
the Information Age are chaotic, complex, multicultural.., and no philosophy
has given yet the general public the road map to find out where these new
phenomena are taking us to : globalisation, the Internet,
bio-technologies, etc.
I maintain libertarianism is that philosophy. Libertarianism
has something to tell us about our behaviour as human beings, how we ought to
relate to others in society and to nature. Libertarian philosophy and ethics
are much more efficient in explaining the transformation which is taking place
in the world than social-democracy, which represents today's consensus (to the
point that the French refer to it as la pensée unique). I am not going
to tell this audience what libertarianism is about, you know as much on
the subject as I do. My purpose today is to share with you my analysis of the
Information Revolution, and let you work out how libertarianism applies. I
would like to start with the proposition that we live in certain types of
societies, which I call Political Societies, for lack of a better term ; that
the last transformation of these Political Societies came as a by-product of
the Machine Age, and that they are slowly dying, as the Machine Age is replaced
by the Information Age, and that societies of a radical new type are forming,
which are best described as Knowledge Societies.
Depending on your beliefs and values, and whether you read
Oswald Spengler, or the Financial Times, or Cosmopolitan, you will variously
say that this move from Political Societies to Knowledge Societies is the end
of Western civilisation, or a world crisis, or the sun entering Aquarius.
Whatever it is, we all know it is fundamental. I believe personally that the
Information Revolution is no less important in magnitude and in impact on the
future of humankind than the revolution which took place in the Neolithic
period, when humanity changed from being nomadic to agricultural. What we are
witnessing here is like a reversal of this process, not that we are going back
roaming the world with backpacks, but that we are slowly adopting the values and
the culture of the nomads and giving up the values and the culture of the
tillers of land. This change in the scale of our values has a profound impact
on all three elements which constitute our Political Societies.
·
Spatially and geographically, our societies are
nation-states.
·
Operationally, they function as democracies.
·
Ideologically, they live by the book of social-democracy,
which is a blend of socialism and nationalism.
Let's see how these three constitutive elements are affected
by the Information Revolution.
7,000 years ago, a new mode of production, agriculture,
created a new mode of living : permanent dwellings, walls, warehouses,
irrigation... Land became the primary source of wealth. A sedentary life
allowed the emergence of the state, as we know it, with a permanent
bureaucracy, financed by recurrent taxes. Where you lived defined in large part
who you were, and where you lived was necessarily within a state, and your
collective identity came to be defined by the state. For a very long time,
nation and state did not coincide. There were people with a lot in common -
religion, language, culture - which were fragmented into many states, like the
ones which merged into present day Italy and Germany, and there were states
which ruled over many different nations, with little in common, the typical
examples being the Russian and Austro-Hungarian empires.
The nation-state really only dates back to the French
Revolution, and there is no reason to think that this way of organising society
is eternal. Certainly, one can make a case that there is a growing demand for
“nation-states”. More are created every year : the Baltic States, Croatia,
Bosnia... This inflation in the number of units may reflect, however, the
diminishing value of each unit, because the reasons for a nation-state
structure are no longer relevant.
The primary reason for a nation-state type structure was to
reduce transaction costs by having a larger and homogenous market for products
and to create economies of scale by reaching a critical mass for the
maintenance of certain so-called common goods, above all, an army. That
reason is now obsolete. The nation is nowhere the scale by which one measures a
market. Consumers have no passport. It is plain that the optimal scale for
so-called common goods is no longer reached at state level. To quote
Daniel Bell, “the nation-state is too big to be bothered with the small things
and it is too small to cope with the big issues”. For instance, nowhere, except
maybe in Japan, is the population homogenous enough to make the provision by
the state of a service such as education an efficient proposition, and the
trend is for more population movements across borders and for more
multiculturalism.
Even in the ultimate attributes of sovereignty, which are
foreign affairs and defence, the nation-state is ineffective. I gave a short
paper here last year about defence problems in the Information Age, in which I
attempted to show that aggression is no longer a factor of geography. We can
wage war today without ever violating the enemy's borders. We can cripple its
telecommunications, air traffic, banking settlements, electricity production,
and many other vital services, by launching a massive infiltration of its
computer systems. In a way, electronic warfare creates a new balance of power
between the highly-developed countries, which their own sophistication renders vulnerable,
and the smaller potential belligerents, who can attack them successfully with a
small gang of hackers. Reprisal is not easy, electronic warfare can be launched
from anywhere in the world, not necessarily from the territory of the
aggressors ; for instance, you could have Algerian hackers, posing as tourists
travelling with laptops, who could attack France simultaneously from hotel
rooms in Rome, in Lebanon, wherever, so that it would take a long time to
determine the identity and the objectives of the aggressors. In other words,
the nation-state is not even good at making war.
We knew the state could not stop terrorism, it could not
restore law and order in our cities ; we now know that the state cannot
even provide that one service which has always been the ultimate reason invoked
by luminaries like Rand and Nozick for keeping it at least in its minimal
format, national defence.
For me, the sad tragedy with the nation-state is that it
reduces everything that you are, the multiple facets of your personality, to a
single dimension : Your nationality. Only one question is relevant : Are
you Serb or are you Croat ? Are you French or Algerian ? If you are
French or Croat, and I am on the other side, I'll kill you or I'll deport you.
Forget that you are a good lover, that you like Beethoven, that you collect
garden gnomes, that you enjoy old claret, that you are a Catholic homosexual
banker who practices Zen meditation... None of this matters. Your only identity
is your nationality. I can only rejoice therefore when I see all the signs that
the nation-state is heading towards the dustbin of history.
The operational procedure of the modern state almost
everywhere is that of democracy. Citizens believe democracy allows them control
over their government, and it does to a large extent, but this control is
useless. Democracy is globalisation's most visible victim. Remember where our
modern democratic system started. It was in Britain, isolated, of course, by
definition ; in the United States, also isolated on the other side of a vast
ocean, and even, isolationist ; and in the Alpine valleys, again a place
where people were secluded, surrounded by steep mountains. In all these places,
whatever the majority decided was applied, there was nothing to prevent it. But
look at what is happening today : very few of the important events which
affect our lives have been decided by any election, because the truly important
events of today are not part of the political domain. Nobody voted the sexual
revolution ; you do not hold a referendum to ban unemployment ; no parliament
decided to put a PC in every home ; it is not elected representatives who
made the Internet global... The Political Society is collapsing, because
everything that is important in the world today is happening outside the realm
of politics. We have gone from a belief in the 1960's slogan : “everything
is political”, to an acknowledgement that politics are irrelevant.
I mentioned that today's Political Societies occupy space in
the form of nation-states, and that their operating procedure is democracy. The
third constitutive element is their common ideology, which is social-democracy.
Admittedly, mainstream political parties do not all claim to be
social-democrats. What about the US Republicans, the Tories in England, the CDU
in Germany.. ? The truth is that any difference between these
organisations is of form much more than of substance. Fidel Castro and Brezhnev
and Mao Ze Dong and Kadar in Hungary boasted also about the differences in
their regime ; the Iranians and the Saudis argue the same way. When you unwrap
the package, however, the product is the same. Without subscribing to
Fukuyama's conclusion that we have reached the end of history, I think we can
agree with him that the quasi universal political agenda on the planet
presently is social democracy. I would even go further and say that the more
democratic a country claims to be nowadays, the more it means it has become a
one-party state ; all its parties stand for the same agenda. Social-democracy
itself is rooted in two ideologies, socialism and nationalism, and my point is
that the Information Revolution is making both of them obsolete.
The democratic electoral system leads to enforced wealth
redistribution, which is socialism. Wealth redistribution is at the core of the
system, no candidate gets elected unless he or she makes the electoral promise
to take from the “rich” and give to the “poor”. Redistribution has become the
process which gives legitimacy to democratic governments. Most human beings
feel this temptation to steal what they have not earned. Society, of course,
cannot allow “unregulated” theft. If it did, there would be no savings, no
investments, producers would consume their output immediately, and such a
society of thieves and victims would soon be absorbed by other groups, more
efficient because they would give some sort of protection to investments.
Because the temptation to steal is still there however, theft everywhere is
“regulated”, it is not outlawed. The rule is that only governments may
steal legally, and governments are even allowed the use of armed force to so
do. Politics, therefore, has become the way to legalise robbery. Democracy's
extraordinary appeal is that it extends to each one of us this capacity to rob
our neighbours. In the old days, legalised robbery was a privilege of a few,
democracy makes everybody believe they can share in the loot, more, that they
can organise the robbery. Robbery has always been the real purpose of any
government, but it has been hidden behind a grand design. We were told that
governments had a mission, that they were governing for the greater glory of
God, or to increase the power of the nation, or to save that nation from
invasion, or to bring civilisation to the savages... None of this ideological
smokescreen works today. It has become all too obvious that the only function
of governments is to ensure the forced redistribution of wealth from a minority
to a majority of the electorate. In many countries, and certainly in France,
the whole rhetoric surrounding la fracture sociale, the meltdown of the
social fabric, is evidence that politicians nowadays can conceive of only one
bond holding society together, and that bond is the one-way dependence which
exists between a parasite and its host, between the robber and his victims. By
a gross abuse of language, social-democrats dare to call “legalised
robbery” : “solidarity” or “social justice”. What I shall attempt shortly
to show is that the Information Revolution makes “legalised robbery” a great
deal more difficult. This is thus one of the reasons why democracy in
particular, and politics in general, are becoming no longer viable.
The other ideology on which democracy is based besides
socialism is nationalism. If casting a ballot can decide on the redistribution
of wealth and on many other issues, such as culture, education, justice,
police, the army, housing and urban planning..., then it becomes essential to
know who has this power to vote and who is entitled to the benefits provided by
the state. The average European voter objects to immigrants, with their 10
children, collecting family welfare ; the Basques don't want the Spaniards
to decree that all education should be in Spanish ; nobody wants the Moslems to
make the sharia the law of the country... But if I don't want this to happen,
then the other side must be denied voting rights, or else those of my
persuasion have no other choice than to secede and create a new state. Witness
how Israel, which claims to be the only democratic state in the Middle East,
never annexed the Occupied Territories and could not create a Greater Israel,
because, by giving all Palestinians an Israeli nationality, the majority of the
country would become Arabic and Moslem. Note how, as soon as democracy was
introduced in Eastern Europe, ethnic violence erupted. No one wanted the rival
ethnic group to gain control of the state, especially a state so much infected
with decades of socialism, controlling as it does so much of one's life. Watch
how Italians in the North of the peninsula are openly talking about secession.
Not to mention Belgium... I remember some time ago, I was sitting in an aeroplane
next to a passenger who introduced himself as a French tax inspector. I was
careful not to give him any details about myself, but I could not disguise my
French accent. In the course of the conversation, I asked him whether he could
give me a single good reason why people ought to pay taxes, other than avoiding
going to jail. “What about helping the poor ?”, he offered. I agreed with
him that there is a case for helping the poor, but I added, “Let's start with
the ones who are the most in need. I am ready to send my tax money to Haiti”.
This bleeding-heart friend of the poor was shocked. “If you are a Frenchman”,
he banged on the armrest between our seats, “your money must go to the French
people !”. Nationalism and socialism are the twin children of democracy. They
go hand in hand ; when you see one, the other is not far behind. The good
news is that they are both bankrupt.
What is causing this bankruptcy ? The Information Revolution
is shattering the three pillars supporting our Political Societies. For the
spatial dimension of the nation-state, the Information Revolution is
substituting virtual communities in cyberspace. To the operating procedure of the nation-state, based on
“democratic robbery” and coercion, the Information Revolution is opposing
offshore commerce, encryption, digital cash... To the twin ideologies of
nationalism and socialism, leading to closed inward-looking social-democratic
societies, the Information Revolution is replying with the physical wiring of
the collective human consciousness.
A mobile society moving from agriculture to commerce, from
land-based to trade-based activities, has always spelt bad news to governments.
The Belgian historian Jacques-Henri Pirenne, who wrote the monumental Great
Trends in History in the 1950s, made a convincing case, I believe, that the
more agricultural, the more sedentary, a society, the more authoritarian its
political tradition. The culture of liberty was stronger in the maritime and
trading nations of Holland, England, Venice, where people could move their
property and their business out of reach of their government, than in the
continental countries of Russia, Germany, Spain... In these countries, most of
the wealth was generated by the landed gentry and their peasants ; later wealth
took on the form of mines and factories, but whether fields or mines, these
immovable assets could be controlled easily by the police and the tax collector.
The maritime and trading societies were not only more independent from the
state, but they cultivated the values of entrepreneurship, self-responsibility
and openness to alternative life-styles. This difference between maritime and
continental societies cuts across nation-states. Compare New York and San
Francisco today with the Mid-West, Shanghai with Beijing, and notice how
France, which is both continental and maritime, sways between the two
traditions. But globalisation, which is a product of the Information
Revolution, means this opposition between liberal trading societies and
agricultural authoritarian ones is no longer imposed on us by geography. If we
wish to, we may all live in the virtual equivalent of the cosmopolitan
open-minded maritime gateways of Amsterdam and San Francisco. We can all
benefit from whatever is generated in terms of products and of ideas, wherever
in the world. We can go further, even break away completely from our land-based
authoritarian societies and embrace the free life of the nomads.
There is a vivid example in the Bible of the difference
between land-based and nomadic societies. Abraham and Loth had a quarrel about
who should be the leader of the tribe. If they had resorted to a vote, the
minority would have had to accept the rule of the leader it didn't like. Being
nomads, however, they had a more sensible option. Abraham rallied those who
wanted to follow him, Loth did the same, each clan took its possessions and
they went their separate ways. Of course, in a land-based society, you cannot
carve up the country around each family's plot of land into thousands of little
enclaves. You have to submit therefore to the leader, whether this leader is
the one you chose or not.
The Information Revolution allows you the joys of nomadism
without the need for you to leave the comfort of your room. You can do what
Abraham did, you can defect, you can drop out, but it's not you who is moving
if you do not wish to ; you need only move your possessions.
I want to stress here another difference, the difference
between a libertarian project and all political revolutions. Libertarians
nurture no desire to change society for others, if others prefer the status
quo. We may find it sad, but the fact is that many people are not interested in
being free, it scares the wits out of them : They have other values. I have no
problem with that. I say to these people : If you like your government,
keep it. If you enjoy being told what to do, if you enjoy being taxed, being
censored, being drafted into the army.., you can have it, but, please, leave me
out of it. The Information Age brings all of us the opportunity to do like
Abraham and Loth, we can opt out of government. This is how, and it starts with
the separation of State and Space.
It will not be agricultural land, coal mines, oil wells,
brick factories, that we will call wealth in the next century ; it will
be information - in all the diverse and exploding manifestations that human
ingenuity can create. And information, by its very nature, is difficult to
restrain. It will soon become impossible for governments to monitor and
manipulate the streams of data that will become the substance of wealth
creation. While tax collectors had the power to confiscate a factory or a pay
cheque, they cannot arrest an idea. A farm cannot be spirited into the night,
but an idea can cross the world in milliseconds.
And this Knowledge Society is already here. I am ready to
bet that nine out of ten of us in this room are knowledge workers. All that we
produce and process is information, whether we are lawyers, computer
programmers, consultants of one kind or another, priests, bankers... What we
do, we could do almost anywhere.
The following businesses, by essence, are “nomadic
businesses” :
·
all companies doing cross-border business, and this is now
the case for most companies
·
all trading in securities, stocks, bonds, investments in
unit trusts, pensions, life insurance
·
all media business, newsletters, television, magazines,
publishing
·
all information related business, databases
·
software
·
gambling
The non-taxability of these nomadic businesses comes from
the development of new technologies of encryption and digital authentication.
For the first time in history, it becomes possible for two parties anywhere on
the globe to transact business that is both confidential and verifiable.
Commercial correspondence, contracts, even the object of the transaction, the
digital product itself, may be encrypted. So it is not that the authorities
cannot stop the business, it is that they don’t even know that it exists.
Accounts can be settled in a new medium
of exchange, digital cash, a technology that allows reliable and verifiable
funds transfers, without leaving a paper trail. There are many projects of
digital cash being tested now, including one by a Dutch entrepreneur, based in
this very city. Digital cash can be exchanged for gold or the currency of your
choice in any offshore jurisdiction, or it can be spent to buy other goods and
services on the net.
I understand Visa, the credit card people, are also looking
at the idea of offering their own currency, because for them, any government
printing cash is a competitor. People will gladly deal in “Visa Money” because
it is accepted in most shops, hotels and businesses around the world.
I know there are tax advisors in this room who can help you
shield your earnings from tax confiscation, but I fear that even their noble
profession is in danger, because very soon it will be so easy to cheat the tax
man, that you won't need any advice on how to do it.
You all know Max Weber's famous definition, “a government is
the agency that exerts the monopoly of legitimate violence over a given
territory”. The separation of State and Space means simply that a vast territory
has been discovered over which no government can exert any violence. That is
not bad for a start, but, just to dampen your enthusiasm, remember you will
still be physically living somewhere, there is still this place in “meatspace”,
where the tax police can catch you. But what can they charge you with ? If
you are self-employed, or employed in a small and smart firm, which knows how
to take good care of its employees, you get paid offshore, and your friendly
tax man knows only the income you are kind enough to declare, which,
presumably, is what you need to justify your visible standard of living. The
big difference becomes that taxes are no longer taxes on wealth creation, they
are taxes on consumption, they are taxes on what you buy in your local shop, like
VAT, or taxes for the services you use locally, like a property tax or a road
tax. All income not spent in your country of residence remains tax free abroad.
Many of us have already adopted this style of living. So you can well
understand that when they hear the words “Information Revolution”, bureaucrats
everywhere brandish garlic and crucifixes. (And they may have a point : If you
believe in the Gnosis, the initials of the World Wide Web, “WWW”, translate as
666, which is the number of the devil !).
Governments can expect even more bad news. What about the
separation of State and Commerce ? When the primary source of wealth was
derived from the land, there was a natural collusion between the governments of
nation-states and business people. Their interests converged. Powerful
companies made governments powerful. Rich companies made their country rich.
Remember all those companies which proudly affirmed their national
origin : US Steel, American Telephone & Telegraph, British Petroleum,
Compagnie Française des Pétroles, and so on. Today they are happy to be known
by a neutral acronym, they are “denationalising” their names. Very few
businesses want to be “national” any more. The Knowledge Society has no
allegiance whatsoever to any political society. Even in Japan, the president of
Sony dared declare recently that Sony is not Japanese, it is a “global
company”.
The only relationship left between politicians and business
people is through taxes and corruption : Taxes, because for the time being they
cannot be entirely avoided ; corruption, because when the government throws
money out of the window, you want to buy yourself a good place under the
window. But as more and more individuals and companies alike evade taxes, money
thrown out of governments windows will dry up. Big companies, which owe their
dinosaurian size mostly to political favours, will lose their importance. Small
will really become efficient, and small, as I pointed out earlier, means even
greater opportunities to escape the long arm of government.
I believe we shall see the eventual separation of State and
Politics. During the 17th and 18th centuries, Western
societies successfully fought to separate the Church from the State. This
separation is not total yet, we still have Sundays, Easter, Christmas, etc., as
legal holidays (Holy Days), we have monogamy, and all sorts of laws which are
nothing but moral precepts ; yet big progress has been made towards shifting religious
matters to the private sphere where they belong. Because religion is purely a
belief, there is no justification to impose this belief onto others, who do not
share it. But politics is also a belief, it cannot be proved that social
democrats govern better than Christian democrats, or the reverse. The next
logical step, therefore, is to separate the State from Politics, and make
politics a private matter, like religion. If my community, which I joined
freely, tells me it is wrong to look at a naked woman's bottom on the screen of
my computer, or that I should wear a kippah, or that I should pay 30% of
my revenues to the Party, I am free to obey or to leave the community. Why
should all others, who have not chosen to join this community, be affected by its
decisions ?
I stopped participating in all democratic elections 20 years
ago, but not because they were useless (at the time I didn't realise they
were). On the contrary, I became an abstentionist because I believed that if my
party won the elections, its program would become the law of the land, it would
be forced on those who had voted against it, an imposition on others which I
didn’t want. Conversely, of course, I expected others to live by their
political opinions, but not to force them on me.
If we separate state from space, from commerce and from
politics, there will be very little left of the State as we know it, so maybe
we could leave it to wither away quietly.
The material conditions of a freer life are slowly being put
in place, not because Libertarians are preaching freedom, although I hope we
all do that, not because politicians are embracing the philosophy of Ayn Rand
and Rothbard, but simply because the procedures of a Political Society can no
longer be adapted to the Information Age. The new societies of the Information
Revolution, the deterritorialised virtual communities which are engendering the
Knowledge Societies, are evolving autonomously from the states, they are not
part of the power-based Political Societies of the Machine Age. People do not
know yet what will replace Political Societies and they worry. What we,
libertarians, can do is to load libertarianism into the Information Age ; we
can explain what is happening because we have conceived it intellectually
already. We can explain that the Knowledge Society which is emerging will bring
freedom, peace and abundance. And if people do not believe us, let them go
their own way. Opt out. Get the government out of your life. We are nomads, so
let's form our own tribe and secede.
Conference
given at a Libertarian Seminar, Amsterdam,
22 February 1997
www.liberalia.com cmichel@cmichel.com